One of the industry's biggest issues in 2011 is the loss of retail shelf space for print titles. The trend of book retailers devoting less space—and generating lower sales—from new books is seen in the recently released 10-k filings from Books-A-Million and Hastings Entertainment. BAM, the nation's third largest bookstore chain, saw book sales in the fiscal year ended January 29 fall 6%, to $385 million, a figure that represented 77.9% of total revenue, down from 80.9% in 2009 and 82.4% in 2008. At the multimedia chain Hastings, books traditionally have been the biggest single category, but in 2010, with book sales down 6.5%, video and books were tied for the top spot, with sales at about $114 million each. In 2009, book sales were $122 million.
The drop in book sales at both retailers is most pronounced among new titles, and both companies credited sales of used and bargain books with helping to offset declines of new books. Hastings reported that comp sales of used and bargain books rose 16.7% in 2010, despite overall book comps falling 4.2%. Overall, used and bargain-priced products accounted for 14.5% of Hastings's total revenue last year, up from 14.2% in the previous year. To help combat the loss of sales from new titles, Hastings said it will increase its focus on selling more used and bargain books. And, in the 10-k, Hastings said it is exploring the possibility of selling e-books on its www
.gohastings.com Web site.
At BAM, a decline in its core book department was mitigated by gains in bargain books, gifts, and other products. Sales in the "other" product segment, which includes music, DVDs, and e-books, also rose in the year, increasing 28.6%, to $40.5 million. As sales of new books fell, revenue through BAM's physical bookstores fell 3.3% in the year, while sales through its Web site rose 9.9%, to $26.2 million. The increase over the Web was attributed to the sale of the Nook (which BAM started selling in the fall) and higher e-book sales.
Although in its 10-k BAM said its basic growth strategy is to add more stores (it opened 11 in 2010 and has 231 outlets), the company does not say how many outlets it plans to open this year. Capital expenditures were $16.8 million last year. Hastings's primary strategy for 2011 is to stick to operating bricks-and-mortar stores in midsize markets. After ending 2010 with 146 stores, it plans to open three outlets this year, relocate or remodel five, and close two. Hastings had 149 stores at the end of 2009. Due mainly to the impact of e-books, in the 10-k Hastings said it expects book comparable store sales to fall by single digits for at least the next two years.
Product Mix, 2009–2010